Trade Policy Review for China: The world's top exporter with “new normal” economic growth

• DOI: http://doi.org/10.1111/twec.12569
• Date: 01 November 2017
• Published date: 01 November 2017
• Author: Xufei Zhang

SPECIAL ISSUE ARTICLE

Trade Policy Review for China: The world’s top

exporter with “new normal”economic growth

Xufei Zhang

Middlesex University Business School, London, UK

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INTRODUCTION

The WTO’s sixth Trade Policy Review (TPR) of China

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in 2016 was undertaken in a period of

economic slowdown. China had enjoyed strong economic growth for a few years after the 2007–

2008 global financial crisis, partially due to the stimulus packages installed by Chinese govern-

ment. During the period under review (2014–2016), the Chinese economy entered a “new normal”

situation with stable but lower GDP growth. Real GDP growth was 7.3% in 2014 and 6.7% in

2016, down from 7.9% in 2012.

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China remained the top exporter in the world during this period, when growth in constant US

dollar value of world exports turned sluggish in 2015 and 2016 at 3.4% and 2.7%, down from

3.6% in 2014. The current dollar value of world trade declined sharply in 2015 as total world trade

fell by 10.8%. Despite slow global trade growth, the share of Chinese exports in world exports

remained stable during 2014–2016: being 10.6%, 11.4% and 10.6%, respectively.

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The WTO’s (2016) World Trade Statistical Review argues that several factors contributed to

the lacklustre performance in world trade: “economic slowdown in China, recessions in other large

developing economies including Brazil, falling prices for oil and other primary commodities,

strong fluctuations in exchange rates, and financial volatility driven by divergent monetary po licies

in developed countries.”In this economic climate, the Chinese government pressed for greater reli-

ance on domestic demand rather than exports. China had also expanded outward foreign direct

investment (FDI) in this period, and the “Belt and Road Initiative”has been launched to promote

trade and influence in Asia, Africa and Europe.

The rest of the paper is organised as follows. Section 2 overviews China’s key trade policies in

the review period. Section 3 examines economic performance, trade and investment. Section 4 dis-

cusses major challenges for trade and economic growth. Section 5 concludes.

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Previous TPRs are evaluated by Sanchez-Fung (2016) and Yao and Liu (2012).

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Data source for GDP growth is from People’s Bank of China (2017), China Financial Stability Report 2016, on http://

www.pbc.gov.cn/jinrongwendingju/146766/146772/146776/3350799/2017072516522223298.pdf.

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Figures are calculated by the author, using data from World Bank, World Development indicators, on http://data.worldba

nk.org/data-catalog/world-development-indicators.

DOI: 10.1111/twec.12569

World Econ. 2017;40:2491–2499. wileyonlinelibrary.com/journal/twec ©2017 John Wiley & Sons Ltd

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